Retailers who offset living wage by cutting benefits will face pressure

Tuesday 19 April 2016 - Veebs Sabharwal

Businesses which cut staff benefits in lieu of paying the national living wage will face pressure to fulfil their moral obligations, a business minisiter has said.

Nick Boles of the Conservative party said there is "simply no excuse" for larger companies who are looking for ways to dodge the impact of the new minimum wage for workers aged 25 and above.

He argued support, including cuts to corporation tax and business rates, has been developed to help them cope, but he cautioned against criticism of small businesses which do not preserve all benefits immediately given the alternative may result in workers being fired.

Boles urged MPs to inform the Government of profitable businesses which are trying to "evade the spirit" of the new laws.

According to Press Association, MPs used a Commons debate to criticise firms, including B&Q, Morrisons, Eat and Cafe Nero, which have responded to the new wage rate by developing new terms and conditions for employees.

Labour MP Joan Ryan said some businesses have sought to scrap double-time on Sundays and bank holidays, seasonal bonuses and other allowances following the initiative that will see adults above 25 receive at least £7.20 an hour, and potentially £9 by 2020.

Boles said he would not start naming companies which fail to maintain existing benefits in the Commons, but added that firms will "shift their position if the spolight falls on them".

"Please bring to me, to (Ms Soubry) any case of a company who seems to be trying to evade the spirit of this legislation in a way that is unreasonable, a company that is profitable, that willbe benefiting from the dramatic cut in corporation tax, a company that will be benefiting from the employer allowance or from the cut in business rates," he said to MPs.

"Bring those cases to me and I promise you that we will use the full force of our office, little though it sometimes feels, to put pressure on those companies to live up not only to the legal obligations, which are our job in making legislation in this House, but to their moral obligations, which are the ones that we feel matter a great deal more."

Boles said previously that there are small employers which will find it challenging under the new system.

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"I do not want to criticise them for an instant if they are not able immediately to be able to ensure that every aspect of the conditions of an employee are preserved in full," he explained.

"Because if the alternative is to actually fire some people then I'd think we'd all agree we'd prefer to have more people being paid the legal national living wage than actually losing their jobs.

"But where I am clear is that for larger employers there is simply no excuse to be trying to evade the effect of the national living wage in increasing people's earnings by cutting other benefits and other premiums."

Moving the debate, Ryan (Enfield North) went on to say that "there is an industry-wide problem - huge supermarket retailers like Morrisons cut their staff pay back months ago to little media attention."